ABSTRACT
This study examines investors’ reactions to changes in the application of accounting standards due to the disclosure of tax amnesty assets and liabilities. To accomplish this objective, we observed all listed companies in the Indonesia Stock Exchange that participated in the tax amnesty program and disclosed the program’s participation in their financial statements. The observation period was from 2015–2017. The results showed that Indonesian Financial Accounting Standards (IFAS) 25 present information on the impact of tax amnesty as error correction is more credible than IFAS 70, presenting assets and liabilities for tax amnesty as additional paid-in capital. It is on record that the earnings response coefficient (ERC) of IFAS 25 is stronger than that of the IFAS 70.
